Approval Rates for Private Student Loans Drop [Report]
Over the past few years, the approval rates for private student loans have declined, despite growth in the overall debt industry, according to a LendEdu report.
The website complied data from nearly 200,000 users who went through LendEDU’s private student loan portal when applying for a private student loan between 2016 and 2019. Lenders like College Ave Student Loans, Sallie Mae, Discover, Citizens Bank, and SunTrust also provided data for the report.
The overall approval rate for private student loans dropped from 25 percent in 2016 to 16 percent in 2019. The co-signer and no-co-signer approval rates also saw steep declines.
From 2016 to 2019, the approval rate for students with cosigners on private student loans decreased from 42 to 33 percent. During the same period, the approval rate for applicants who applied without a cosigner fell from 12.96 percent to 7.43 percent.
In 2019, out of all private student loan applicants, 64 percent of applied without a co-signer, while 36 percent applied with a co-signer. On average, the amount for a private student loan that was approved was $13,780 between 2016 to 2019.
Private lenders charged varying average interest rates for applicants applying with and without cosigners.
The average interest rate on private student loans without a co-signer went up from 8 percent in 2016 to 10.63 percent in 2019, while the average interest rate on loan with a co-signer rose from 7.90 percent in 2016 to 9.81 percent in 2019.